Hello to my friends who love life and keep smiling despite all kinds of negativity. It is very important to think rationally in cryptocurrency markets. If you want to make money in these markets, you shouldn't be a cryptocurrency fanatic. You have to take your earnings and look for other opportunities. Today, we will examine Gambler's Fallacy or Monte Carlo Fallacy, which are very common in the cryptocurrency markets and an attitude that an investor should not do. Let's learn together…
If you are not familiar with probability calculations, you are more likely to make false assumptions and predictions about certain types of events.
The initiation of an event is independent of the past event. Rationally, this way of thinking is wrong; Past events do not affect the likelihood of certain events occurring later.
As an example, we can consider a coin toss experiment. If the coin has been thrown into the air 20 times in a row and the "heads" side up each time, according to a gambler's delusion, the next coin toss is more likely to have the "tails" side. After all, isn't it about the time the probability of the other outcomes, that is, "tails", if he has come up with "heads" so many times?
Actually, this is a completely wrong approach. The probability of heads or tails in a coin toss is always 50 percent. Since every coin toss is an independent event, the consequences of all previous coin shots (no matter how unusual the results may be) have no effect on future coin shots.
Gambler’s Fallacy in the cryptocurrency markets
In many cases, investors can go wrong with Gambler's Fallacy. As an example, some investors think that after a few days in the cryptocurrency market they should sell in an investment position. The underlying logic is that the cryptocurrency has not been enough to come out after that, or the cryptocurrency has not risen for three days, so it will not rise. On the other hand, some investors do not throw away a cryptocurrency that has fallen for several consecutive days. Because they see the rise of cryptocurrency as a "matter of time". There are other factors (positive or negative news) in the cryptocurrency market. The situation is more complicated than a coin shot. But this line of thinking is still a reflection of Gambler's Fallacy.
In finishing…
To prevent Gambler’s Fallacy, it is an example of irrational behavior to buy this cryptocurrency, thinking that it is time for a long-falling cryptocurrency, that the trend will turn. So investors should look with fundamental and technical analysis of the crypto to really predict what a trend will be. Sensuality causes you to lose your assets. All you have to do is think rationally. You need to understand what the cryptocurrency you are interested in, look at its key indicators, review its technical analysis. If you do not do this, you cannot escape the delusion of gamblers. Keep this in mind; Do not think that you can get different results by doing the same thing… As I always said, listen to everyone, decide for yourself ...
I'm looking forward to your comments. Thanks to your comments, we can shape my next articles together. Let's stay in touch… Take care of yourself so that you and the people around you are happy…
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